Barclays has asked JP Morgan Cazenove to shop its exchange-traded-funds business as it seeks to shore up its capital cushion, according to a person familiar with the matter.

Selling the iShares business -- which is part of Barclays Global Investors, the British bank's San Francisco-based asset-management arm -- could fetch £4bn ($5.6bn), the person said. But the business also could bring less, given that some analysts have valued the whole of Barclays Global Investors at about £5bn.

"Barclays notes press comment regarding the potential disposal of iShares and confirms that it has held discussions with a number of potentially interested parties as part of its practice of regularly reviewing the group's portfolio of businesses," Barclays said Monday. "No decision regarding the disposal of any business has been taken by the board of Barclays."

The UK bank also confirmed that it is in "dialogue" with the UK Treasury and Financial Services Authority regarding its potential participation in the government's asset protection scheme.

Exploration of a sale is part of a process that finds Barclays, one of the most thinly capitalized UK banks, trying to raise cash to avoid turning to the government for help. Analysts have said Barclays may have to raise money by selling assets or issuing shares. One option would be for the bank to issue shares to the UK government, which Barclays has said it wants to avoid in order to maintain commercial independence.

Scrutiny of Barclays's capital levels comes as the bank debates whether it will take part in the UK government's asset-insurance plan. The plan would help Barclays limit future losses, but the cost to participate could deplete the bank's capital cushion, a key measure of its financial strength.

Barclays may seek to raise capital regardless of whether it participates in the government's insurance plan, people close to the matter say. The bank must decide by the end of the month whether it will insure a pool of troubled assets under the plan.

The exchange-traded funds business has been a rare bright spot in the financial industry in the past year. Investors have continued to pour cash into these funds, which track indexes ranging from big-company US stocks, to bonds, commodities and real estate. Barclays took in $56.3bn (€43.2bn) in new assets in 2008, just shy of its 2007 total, giving it $254.7bn in assets.